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Good-bye to one more Budget tradition

By A K Bhattacharya
March 17, 2006 09:21 IST
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Among the many time-honoured parliamentary traditions, dutifully observed by governments since Independence, the one pertaining to the presentation of the Union Budget every year has seen the least number of changes.

And most of the changes that have taken place so far are significant and have made a substantial difference to the quality of parliamentary supervision of a government's most important economic statement of the year.

There are a few insignificant changes too. Of these, the change in the time of the day when a Budget is presented was announced with a lot of fanfare. Rising to present the Budget for 1999-2000, Yashwant Sinha had said: "For the first time after Independence with the enthusiastic support of all political parties in Parliament, it has been possible for me to discard the long-standing tradition of British Raj of presenting the budget at 5 p.m." The Budget that year, the last one to be presented in the twentieth century, was read out by the finance minister at around noon.

Jaswant Singh, Mr Sinha's successor, made one more change. Till 2002-03, Budget speeches used to be delivered in two parts. While the first part would contain the finance minister's macro-economic assessment of the year, programmes, policy changes and the detailed account of the expenditure to be made under both plan and non-plan heads, the second part would deal with the government's proposals on direct and indirect taxes and the final deficit status.

In his first Budget for 2003-04, Mr Singh merged the two parts into one and introduced an index of all the key proposals at the end of his speech. The index has been discarded by his successors, but the Budget speech continues to be a single-volume document.

The reason why changes in the presentation of Budgets are being discussed in this column is because a unique manner of approving the 2006-07 Budget has been adopted. But first, it would be useful to recount some of the more significant changes that took place in the last ten years.

The "dream Budget" of Mr Chidambaram was presented in February 1997. But even before this could be passed by Parliament, there was a change of guard at the Centre, giving rise to fears if Mr Chidambaram's Budget would fail to get the necessary parliamentary sanction. H D Deve Gowda had to step down as Prime Minister and make way for Inder Kumar Gujral.

The question was since Mr Gujral's was technically a new government, can the Budget presented under the Deve Gowda regime be considered for approval under a government headed by Mr Gujral? Eventually, these doubts were set at rest and the same Budget was passed by Parliament.

The National Democratic Alliance (NDA) government of Atal Bihari Vajpayee introduced a new convention under which parliamentary standing committees were to be set up to examine the Budget-related expenditure proposals of central ministries. Since then, Parliament has been going in for recess for about a fortnight a couple of weeks after the presentation of the Budget.

This recess is used by the standing committees to examine the ministries' expenditure proposals. By the time Parliament resumes its budget session, these reports are ready and the Budget is examined in detail before it is cleared by the second or third week of May. It is a lengthy process. But over the years, this has conferred on the Budget exercise a kind of legitimacy that is needed in parliamentary democracy.

There have been exceptions. For instance, in 1999, the Vajpayee government lost its majority in the Lok Sabha just after the Budget was presented. A fresh round of general elections was to be held. This meant that the Budget that was presented could lapse. Parliamentarians were aware of the fiscal implications and took the unusual step of holding a special session to pass the Budget after the government actually fell. Parliamentary tradition took the hit, but the Budget was saved.

There is no political or fiscal crisis this year. And yet, our parliamentarians have decided that the Budget this year would be debated for less than a month and approved before Parliament goes in for recess at the end of the third week of March.

So, there is no detailed discussion of the Budget proposals. Parliamentary standing committees can examine the ministries' expenditure proposals and submit their reports as and when they choose to do so. The government will consider the recommendations of those reports for implementation on merit during the year. But the Budget approval process need not be made contingent upon the submission of the reports. This is the new wisdom.

Is bidding good-bye to an old parliamentary tradition of subjecting Budget proposals to detailed scrutiny a healthy practice? Is it just recognising the harsh reality that hardly any useful debate over the Budget takes place in Parliament and hence the Budget approval process need not be held hostage to such reports and discussions?

Or is it that the economy has matured to a level where Budgets have ceased to spring big surprises for you and me (with fairly stable tax rates) and therefore need less time be devoted in Parliament?

Either way, it is a major change in India's parliamentary traditions and not much would have been lost if this change had preceded some public debate and discussion.

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A K Bhattacharya
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